1
As filed with the Securities Registration No.
and Exchange Commission on
.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
DUNDEE MINING INC.
(Name of small business issuer in its charter)
Nevada 1081
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(State or Other (Primary Standard (IRS Employer
Jurisdiction of Industrial Identification #)
Organization) Classification Code)
DUNDEE MINING INC. Conrad C. Lysiak, Esq.
412 Memorial Drive N.E. 601 West First Avenue, Suite 503
Calgary, Alberta, Canada T2E 4Y7 Spokane, Washington 99201
(403) 265-8788 (509) 624-1475
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(Address and telephone of (Name, address and telephone
registrant's executive office) number of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this
Registration Statement.
If this Form is filed to register additional common stock for an
offering under Rule 462(b) of the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering.
If this Form is a post-effective amendment filed under Rule 462(c) of
the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective
registration statement for the same offering.
If this Form is a post-effective amendment filed under Rule 462(d) of
the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made under Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Aggregate
Securities Amount To Be Offering Price Offering Registration
To Be Registered Registered Per Share Price Fee
[1]
Common Stock: 4,000,000 Shares $0.05 $200,000 $
100.00
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[1] Estimated solely for purposes of calculating the registration
fee under Rule 457(c).
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL
THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON DATES AS THE
COMMISSION, ACTING UNDER SAID SECTION 8(a), MAY DETERMINE.
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Prospectus
DUNDEE MINING INC.
Shares of Common Stock
No Minimum - 4,000,000 Maximum
Before this offering, there has been no public market for the
common stock.
We are offering up to a total of 4,000,000 shares of common
stock on a best efforts, no minimum, 4,000,000 shares maximum. The
offering price is $0.05 per share. There is no minimum number of
shares that we have to sell. There will be no escrow account. All
money received from the offering will be immediately used by us and
there will be no refunds. The offering will be for a period of 90
days from the effective date and may be extended for an additional 90
days if we so choose to do so.
Investing in our common stock involves risks. See "Risk
Factors" starting at page 6.
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Price Aggregate Proceeds
Per Share Offering Price to Us
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Common Stock $0.05 $200,000 $165,000
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or determined if this prospectus is truthful or complete. It's
illegal to tell you otherwise.
The date of this prospectus is ____________________.
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TABLE OF CONTENTS
Page No.
Summary of Prospectus . . . . . . . 5
Risk Factors . . . . . . . . . 6
Risks Associated with Our Company . . . . 6
Risks Associated with this Offering . . . . 8
Use of Proceeds . . . . . . . . 9
Determination of Offering Price . . . . . 10
Capitalization . . . . . . . . . 10
Dilution of the Price You Pay for Your Shares . . . 11
Plan of Distribution; Terms of the Offering . . . 14
Business . . . . . . . . . . 16
Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . 20
Management . . . . . . . . . . 23
Executive Compensation . . . . . . . 25
Principal Shareholders . . . . . . . 25
Description of Securities . . . . . . . 26
Certain Transactions . . . . . . . 28
Litigation . . . . . . . . . . 28
Experts . . . . . . . . . . 28
Legal Matters . . . . . . . . . 28
Financial Statements . . . . . . . . 29
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SUMMARY OF OUR OFFERING
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This summary highlights important information about our business
and about this offering. Because it is a summary, it doesn't contain
all the information you should consider before investing in the
common stock. So please read the entire prospectus.
Our Business
We are an exploration stage company. We own one property. We
intend to explore for gold on the property.
Our administrative office is located at 412 Memorial Drive, NE,
Calgary, Alberta, Canada T2E 4Y7, telephone (403) 265-8788 and our
registered statutory office is located at 5844 South Pecos Road,
Suite D, Las Vegas, Nevada 89120. Our fiscal year end is December 31.
The Offering
Following is a brief summary of this offering:
Securities being offered . . . Up to 4,000,000 shares of
common stock, par value
$0.00001.
Offering price per share . . $ 0.05
Offering period . . . . The shares are being offered
for a period not to exceed 90
days, unless extended by our
board of directors for an
additional 90 days.
Net proceeds to our company . . Approximately $165,000.
Use of proceeds . . . . We will use the proceeds to
pay for offering expenses,
research and exploration.
Number of shares outstanding
before the offering . . . 5,000,000
Number of shares outstanding
after the offering . . . 9,000,000
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RISK FACTORS
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Please consider the following risk factors before deciding to
invest in our common stock
Risks Associated with Our Company:
1. We expect losses to continue, and the failure to generate
revenues could cause us to go out of business.
We were incorporated in September 2000 and we have not started
our proposed business operations or realized any revenues. We have no
operating history upon which an evaluation of our future success or
failure can be made. Our net loss since inception is $268,435. Our
ability to achieve and maintain profitability and positive cash flow
is dependent upon
* our ability to locate a profitable mineral property
* our ability to generate revenues
* our ability to reduce exploration stage costs.
Based upon current plans, we expect to incur operating losses in
future periods. This will happen because there are expenses
associated with the research and exploration of our mineral
properties. We cannot guarantee that we will be successful in
generating revenues in the future. Failure to generate revenues will
cause us to go out of business.
2. We are subject to risks inherent in the establishment of a
new business enterprise.
We are subject to risks inherent in the establishment of a new
business enterprise including limited capital resources, possible
delays in the exploration of our properties, and possible cost
overruns. If we are not able to address these events, should they
occur, we may have to curtail or suspend our operations.
3. We have no known mineral reserves and if we cannot find any
we will have to cease operations.
We have no mineral reserves. If we do not find a mineral
reserve containing gold or if we cannot develop the mineral reserve,
either because we do not have money to do it or because it will not
be economically feasible to do it, we will have to cease operations
an you will loose your investment.
4. Weather interruptions in the province of British Columbia
may affect and delay our proposed exploration operations.
Our proposed exploration work can only be performed
approximately eight to mine months out of the year. This is because
rain and snow cause roads leading to our claims to be impassible
during four months of the year. When roads are impassible, we are
unable to work and generate income.
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5. Because we are small and do not have much capital, we must
limit our exploration.
Because we are small and do not have much capital, we must limit
our exploration. There are other larger exploration companies that
could and probably would spend more time and money exploring the
property.
6. We will have to suspend our exploration plans if we do not
have access to all of the supplies and materials we need.
Competition and unforeseen limited sources of supplies in the
industry could result in occasional spot shortages of supplies, like
dynamite, and equipment like bulldozers and excavators that we
might need to conduct exploration. We have not attempted to locate
or negotiate with any suppliers of products, equipment or materials.
We will attempt to locates products, equipment and materials after
this offering is complete. If we cannot find the products and
equipment we need, we will have to suspend our exploration plans
until we do find the products and equipment we need.
7. People we do business with may not be year 2000 compliant.
We are year 2000 compliant. We do not know if people we will be
doing business with in the future are year 2000 compliant. If
someone we do business with is not year 2000 compliant, the services
or products he furnishes to us could be interrupted. If the services
or products are interrupted, we may have to suspend operations while
he corrects his year 2000 compliance.
8. We may not have enough money to complete our exploration .
We may not have enough money to complete the exploration of the
property. If it turns our that we have not raised enough money to
complete our exploration program, we will try to raise additional
funds from a second public offering, a private placement or loans.
At the present time, we have not made any plans to raise additional
money and there is no assurance that we would be able to raise
additional money in the future. In we need additional money and
can't raise it, we will have to suspend or cease operations.
9. Our sole officer and director has a conflict of interest in
that he is an officer and director of other mining companies.
Our sole officer and director has a conflict of interest in that
he is an officer and director of other mining companies. In the
future, if we decide to acquire a mining property which is also
sought by one of the companies which Mr. Lozinski is an officer or
director, a direct conflict of interest could result.
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Risks Associated with This Offering:
10. Because we are a penny stock, you may not be able to
resell our shares.
Our common stock is defined as a "penny stock" under the
Securities and Exchange Act of 1934, and its rules. Because we are a
penny stock, you may be unable to resell our shares. This is because
the Exchange Act and the penny stock rules impose additional sales
practice and disclosure requirements on broker-dealers who sell our
securities to persons other than ^ accredited investors. As a
result, fewer broker/dealers are willing to make a market in our
stock.
11. After this offering, control of the company will remain
with Mr. Lozinski which may inhibit a change of control.
Even if we sell all 4,000,000 shares of common stock in this
offering, Mr. Lozinski will still own 5,000,000 shares and will
continue to control us. As a result, after completion of this
offering, regardless of the number of shares we sell, Mr. Lozinski
will be able to elect all of our directors and control our operations
and your ability to cause a change in the course of our operations is
eliminated. Our articles of incorporation do not provide for
cumulative voting. Cumulative voting is a process that allows a
shareholder to multiply the number of shares he owns times the number
of directors to be elected. That number is the total votes a person
can cast for all of the directors. Those votes can be allocated in
any manner to the directors being elected. Cumulative voting, in
some cases, will allow a minority group to elect at least one
director to the board.
12. Mr. Lozinski's control can have a depressive effect on the
market price of stock.
Because Mr. Lozinski will control us after the offering,
regardless of the number of shares sold, the value attributable to
the right to vote is gone. This could result in a reduction in the
market value to the shares you own because of the ineffective voting
power.
13. Mr. Lozinski will receive a substantial benefit from your
investment.
Our Mr. Lozinski, our only shareholder will receive a
substantial benefit from your investment. He is loaning us $15,979
which has to be repaid. You, on the other hand, will be providing
all of the cash for our operations. As a result, if we cease
operations for any reason, you will loose your investment while Mr.
Lozinski will loose only approximately $15,979.
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14. Because there is no public trading market for our common
stock, you may not be able to resell your shares.
There is currently no public trading market for our common
stock. Therefore there is no central place, like a stock exchange
or electronic trading system, to resell your shares. If you do want
to resell your shares, you will have to locate a buyer and negotiate
your own sale. Therefore, you may not be able to resell your shares.
15. There is no minimum number of shares that must be sold and
we will not refund any funds to you.
There is no minimum number of shares that must be sold in this
offering, even if we raise a nominal amount of money. Any money we
receive will be immediately appropriated by us. We may not raise
enough money to start or complete exploration. No money will be
refunded to you under any circumstances.
16. You may be investing in a company that does not have
adequate funds to conduct its operations.
Because there is no minimum number of shares that must be sold
and we will not refund any funds to you, it is possible that we may
not raise enough funds to conduct our operations. If that happens,
you will suffer a loss in the amount of your investment.
17. Sales of common stock by Mr. Lozinski, our sole officer and
director will likely cause the market price for the common stock to
drop.
A total of 5,000,000 shares of stock were issued to our Rodney
L. Lozinski our sole officer and director. He paid an average price
of $0.00001 per share. He will likely sell a portion of his stock
if the market price goes above $0.05. If he does sell his stock into
the market, the sales may cause the market price of the stock to
drop.
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USE OF PROCEEDS
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Our offering is being made on a best efforts - no minimum basis.
The net proceeds to us after deducting offering expenses of $35,000
will be $165,000 if all of the shares are sold. The first $50,000
raised will be used for offering expenses. We will use the net
proceeds as follows:
Amount raised $ 50,000 $100,000 $150,000 $200,000
Allocation
Offering expenses $ 35,000 $ 35,000 $ 35,000 $ 35,000
Repayment of Loan $ 15,000 $ 15,000 $ 15,000 $ 15,000
Exploration $ 0 $ 50,000 $100,000 $140,000
Working capital $ 0 $ 0 $ 0 $ 10,000
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Exploration expenditures consist of consulting services, costs
of obtaining geologic literature, and costs of obtaining personal
interviews with geologists, mining engineers and others familiar with
the properties. Exploration expenditures also include the cost of
mapping, geophysical testing, geochemical testing, and digging
trenches, pits and tunnels. We are not going to spend any sums of
money or implement our exploration program until this offering is
completed.
Working capital is the cost related to operating our
office. It is comprised of expenses for telephone service, mail,
stationary, accounting, acquisition of office equipment and supplies,
and the salary for one secretary, if needed.
We have allocated a wide range of money for exploration. That
is because we do not know how much will ultimately be needed for
exploration. If we are successful in immediately finding gold, we
will stop exploring and go on to develop the property. Costs of
exploring will then cease. On the other hand if we do not
immediately find gold, we will continue to explore for gold on the
property. If we have to continue to explore for gold, the costs of
exploration will increase.
While we currently intend to use the proceeds of this offering
substantially in the manner set forth above, we reserve the right to
reassess and reassign the use if, in the judgement of our board of
directors, changes are necessary or advisable. At present, no
material changes are contemplated. Should there be any material
changes in the above projected use of proceeds in connection with
this offering, we will issue an amended prospectus reflecting the
same.
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DETERMINATION OF OFFERING PRICE
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The price of the shares we are offering was arbitrarily
determined in order for us to raise up to a total of $200,000 in this
offering. The offering price bears no relationship whatsoever to our
assets, earnings, book value or other criteria of value. Among the
factors considered were:
* our lack operating history
* the proceeds to be raised by the offering
* the amount of capital to be contributed by purchasers in
this offering in proportion to the amount of stock to be
retained by our existing Stockholders, and
* our relative cash requirements.
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CAPITALIZATION
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The following table sets forth our capitalization at October 31,
2000, on a historical basis and as adjusted to reflect the sale of
the shares.
This table should be read in conjunction with the section
entitled, Management's Discussion and Analysis of Financial Condition
and Results of Operations our Financial Statements and Notes; and
other financial and operating data included elsewhere in this
prospectus.
10/31/00 As Adjusted After Offering
Actual 25% 50% 75% 100%
Stockholder's Equity:
Common Stock: 100,000,000
shares authorized,
par value $0.00001
5,000,000 issued and
outstanding $ 50
6,000,000 issued and
outstanding $ 60
7,000,000 issued and
outstanding $ 70
8,000,000 issued and
outstanding $ 80
9,000,000 issued and
outstanding $ 90
Additional Paid-in
Capital $ 249,950 $ 299,940 $ 349,930 $ 399,920 $ 449,910
Deficit accumulated
during the
exploration stage $(268,435) $(303,435) $(303,435) $(303,435) $(303,435)
--------- --------- --------- --------- ---------
TOTAL STOCKHOLDERS'
EQUITY (deficit) $ (18,435) $ (3,435) $ 46,565 $ 96,565 $ 146,565
========= ========= ========= ========= =========
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DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
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Dilution represents the difference between the offering price
and the net tangible book value per share immediately after
completion of this offering. Net tangible book value is the amount
that results from subtracting total liabilities and intangible assets
from total assets. Dilution arises mainly as a result of our
arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a
result of the lower book value of the shares held by our existing
stockholders.
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As of October 31, 2000, the net tangible book value of our
shares of common stock was a deficit of $18,435 or approximately
($0.0037) per share based upon 5,000,000 shares outstanding.
Upon completion of this offering, in the event all of the shares
are sold, the net tangible book value of the October 31 shares to be
outstanding will be $146,565, or approximately $0.0163. The net
tangible book value of the shares held by our existing stockholders
will be increased by $0.0200 per share without any additional
investment on their part. You will incur an immediate dilution from
$0.05 per share to $0.0163 per share.
Upon completion of this offering, in the event 75% of the shares
are sold, the net tangible book value of the 8,000,000 shares to be
outstanding will be $96,565, or approximately $0.0121 per share. The
net tangible book value of the shares held by our existing
stockholders will be increased by $0.0158 per share without any
additional investment on their part. You will incur an immediate
dilution from $0.05 per share to $0.0121 per share.
Upon completion of this offering, in the event 50% of the shares
are sold, the net tangible book value of the 7,000,000 shares to be
outstanding will be $46,565, or approximately $0.0067 per share. The
net tangible book value of the shares held by our existing
stockholders will be increased by $0.0103 per share without any
additional investment on their part. You will incur an immediate
dilution from $0.05 per share to $0.0067 per share.
Upon completion of this offering, in the event 25% of the shares
are sold, the net tangible book value of the 6,000,000 shares to be
outstanding will be $(3,435), or approximately $(0.0006) per share.
The net tangible book value of the shares held by our existing
stockholders will be increased by $0.0031 per share without any
additional investment on their part. You will incur an immediate
dilution from $0.05 per share to $(0.0006) per share.
After completion of this offering, if 4,000,000 shares are sold,
you will own approximately 44.44% of the total number of shares then
outstanding shares for which you will have made a cash investment of
$200,000, or $0.05 per share. Our existing stockholders will own
approximately 55.56% of the total number of shares then outstanding,
for which they have made contributions of cash and/or services and/or
other assets, totaling $250,000, or approximately $0.05 per share.
After completion of this offering, if 3,000,000 shares are sold,
you will own approximately 37.50% of the total number of shares then
outstanding shares for which you will have made a cash investment of
$150,000, or $0.05 per share. Our existing stockholders will own
approximately 62.50% of the total number of shares then outstanding,
for which they have made contributions of cash and/or services and/or
other assets, totaling $250,000, or approximately $0.05 per share.
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After completion of this offering, if 2,000,000 shares are sold,
you will own approximately 28.57% of the total number of shares then
outstanding shares for which you will have made a cash investment of
$100,000, or $0.05 per share. Our existing stockholders will own
approximately 71.43% of the total number of shares then outstanding,
for which they have made contributions of cash and/or services and/or
other assets, totaling $250,000, or approximately $0.05 per share.
After completion of this offering, if 1,000,000 shares are sold,
you will own approximately 16.67% of the total number of shares then
outstanding shares for which you will have made a cash investment of
$50,000, or $0.05 per share. Our existing stockholders will own
approximately 83.33% of the total number of shares then outstanding,
for which they have made contributions of cash and/or services and/or
other assets, totaling $250,000, or approximately $0.05 per share.
The following table compares the differences of your investment
in our shares with the investment of our existing stockholders.
Existing Stockholders
Price per share . . . . . . . $ 0.05
Net tangible book value per share before offering . $ (0.0037)
Net tangible book value per share after offering $ 0.0163
Increase to present stockholders in net tangible book
value per share after offering . . . . $ 0.0200
Capital contributions . . . . . . $ 250,000
Number of shares outstanding before the offering 5,000,000
Number of shares after offering
held by existing stockholders . . . . 5,000,000
Percentage of ownership after offering . . . 55.56%
Purchasers of Shares in this Offering if all Shares Sold
Price per share . . . . . . . $ 0.05
Dilution per share . . . . . . . $ 0.0337
Capital contributions . . . . . . $ 200,000
Number of shares after offering held
by public investors . . . . . . 4,000,000
Percentage of ownership after offering . . . 44.44%
Purchasers of Shares in this Offering if 75% of Shares Sold
Price per share . . . . . . . $ 0.05
Dilution per share . . . . . . . $ 0.0379
Capital contributions . . . . . . $ 150,000
Number of shares after offering held
by public investors . . . . . . 3,000,000
Percentage of ownership after offering . . . 37.50%
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Purchasers of Shares in this Offering if 50% of Shares Sold
Price per share . . . . . . . $ 0.05
Dilution per share . . . . . . . $ 0.0433
Capital contributions . . . . . . $ 100,000
Number of shares after offering held
by public investors . . . . . . 2,000,000
Percentage of ownership after offering . . . 28.57%
Purchasers of Shares in this Offering if 25% of Shares Sold
Price per share . . . . . . . $ 0.05
Dilution per share . . . . . . . $ (0.0506)
Capital contributions . . . . . . $ 50,000
Number of shares after offering held
by public investors . . . . . . 1,000,000
Percentage of ownership after offering . . . 16.67%
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PLAN OF DISTRIBUTION; TERMS OF THE OFFERING
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We are offering up to a total of 4,000,000 shares of common
stock on a best efforts, no minimum, 4,000,000 shares maximum. The
offering price is $0.05 per share. There is no minimum number of
shares that we have to sell. There will be no escrow account. All
money received from the offering will be immediately used by us and
there will be no refunds. The offering will be for a period of 90
days from the effective date and may be extended for an additional 90
days if we so choose to do so.
There is no minimum number of shares that must be sold in this
offering. Any money we receive will be immediately appropriated by
us for the uses set forth in the Use of Proceeds section of this
prospectus. No funds will be placed in an escrow account during the
offering period and no money will be returned once the subscription
has been accepted by us.
We will sell the shares in this offering through Rodney L.
Lozinski, our sole officer and director. Mr. Lozinski will receive
no commission from the sale of any shares. Mr. Lozinski will not
register as a broker-dealer under Section 15 of the Securities
Exchange Act of 1934 in reliance upon Rule 3a4-1. Rule 3a4-1 sets
forth those conditions under which a person associated with an issuer
may participate in the offering of the issuer's securities and not be
deemed to be a broker-dealer. The conditions are that:
1. The person is not subject to a statutory disqualification, as
that term is defined in Section 3(a)(39) of the Act, at the time of
his participation; and,
2. The person is not compensated in connection with his
participation by the payment of commissions or other remuneration
based either directly or indirectly on transactions in securities;
15
3. The person is not at the time of their participation, an
associated person of a broker-dealer; and,
4. The person meets the conditions of Paragraph (a)(4)(ii) of
Rule 3a4-1 of the Exchange Act, in that he (A) primarily performs, or
is intended primarily to perform at the end of the offering,
substantial duties for or on behalf of the Issuer otherwise than in
connection with transactions in securities; and (B) is not a broker
or dealer, or an associated person of a broker or dealer, within the
preceding twelve (12) months; and (C) do not participate in selling
and offering of securities for any Issuer more than once every twelve
(12) months other than in reliance on Paragraphs (a)(4)(i) or
(a)(4)(iii).
Mr. Lozinski is not subject to disqualification, is not being
compensated, and is not associated with a broker-dealer. Mr.
Lozinski is and will continue to be one of our officers and directors
at the end of the offering and has not been during the last twelve
months and is currently not a broker/dealer or associated with a
broker/dealer. Mr. Lozinski has not during the last twelve months
and will not in the next twelve months offer or sell securities for
another corporation.
Only after our registration statement is declared effective by
the SEC, we intend to advertise, through tombstones, and hold
investment meetings in various states where the offering will be
registered. We will not utilize the Internet to advertise our
offering. We will also distribute the prospectus to potential
investors at the meetings and to our friends and relatives who are
interested in us and a possible investment in the offering.
Offering Period and Expiration Date
This offering will start on the date of this prospectus and
continue for a period of 90 days. We may extend the offering period
for an additional 90 days, or unless the offering is completed or
otherwise terminated by us.
Procedures for Subscribing
If you decide to subscribe for any shares in this offering, you
must
1. execute and deliver a subscription agreement
2. deliver a check or certified funds to us for acceptance or
rejection.
All checks for subscriptions must be made payable to "DUNDEE MINING
INC."
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Right to Reject Subscriptions
We have the right to accept or reject subscriptions in whole or
in part, for any reason or for no reason. All monies from rejected
subscriptions will be returned immediately by us to the subscriber,
without interest or deductions. Subscriptions for securities will be
accepted or rejected within 48 hours after we receive them.
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BUSINESS
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General
We were incorporated in the State of Nevada on September 20,
2000. We are engaged in the acquisition and exploration of mining
properties. We maintain our statutory registered agent's office at
5844 South Pecos Road, Suite D, Las Vegas, Nevada 89120 and our
business office is 412 Memorial Drive NE, Calgary, Alberta, Canada
T2E 4Y7. Our telephone number is (403) 265-8788. Our offices are
donated by our President at no cost to us.
Background
In July 2000, Rodney L. Lozinski our sole officer and director,
retained Locke Goldsmith, an unrelated third party, to stake one
property containing ten unpatented mining claims in the Nickel Plate
Mountain area of the Hedley, Osoyoos Mining Division, British
Columbia, Canada, in exchange for $878.00. The claims are recorded
in Mr. Goldsmith's name for tax purposes, title to the claims has
been conveyed to Mr. Lozinski by a recorded bill of sale, who in turn
has conveyed the property to us in trust by an unrecorded instrument.
We do not intend to acquire the property by recorded instrument until
we have completed our exploration of the property. The claims are
recorded in Mr. Lozinski's name to a avoid paying additional fees.
Should Mr. Lozinski transfer title to another person and that
conveyance is recorded before recording a conveyance to us, that
person will have superior title and we will have none. If that event
occurs, however, Mr. Lozinski will be liable to us for monetary
damages for breach of contract. Under British Columbia provincial
law, if the deed is recorded in our name, we will have to pay a
minimum of $500.00 and file other documents since we are a foreign
corporation in Canada. We have decided that if gold is discovered on
the property and it is economical to remove the gold, we will record
the conveyance, pay the additional tax, and file as a foreign
corporation.
To date we have not performed any work on the property. We are
presently in the exploration stage and there is no assurance that a
commercially viable mineral deposit, a reserve, exists in the
property until further exploration is done and a comprehensive
evaluation concludes economic and legal feasibility.
17
Location and Access
The property is located on the upper eastern slopes of Nickel
Plate Mountain near the headwaters of Cahill Creek on the Thompson
Plateau. The property is situated approximately three miles
northeast of Highway 3 and approximately 3.2 miles east of the
village of Hedley.
Two accessible roads lead to the north end of the property. The
Nickel Plate Mine road departs northeasterly from Highway 3 at a
point approximately two miles southeast of Hedley. The Apex Mountain
road departs westerly from Highway 97 at Penticton. The two road
join at the headwaters of Cahill Creek where a dirt road branches
southwesterly and passes through the entire property. Various spur
roads within the property provide additional access.
History of Previous Work
The area around the property has been explored extensively since
the 1890s and gold have been discovered nearby. The property has no
history of previous exploration.
Physiography
The property lies between 1,700 and 1,900 feet above sea level.
Vegetation is moderate at all levels. There is ample water and
timber within the property to support exploration. The property is
free of snow from April through December, allowing eight to nine
months of exploration each year. The property is within easy
commuting distance from Penticton which is the nearest center with
facilities.
Property Geology
The main rock types occurring in the area are volcanic and
sedimentary rocks. Gold is found in volcanic and sedimentary rocks.
We have not determined if there is any gold on the property.
MAP SUPPLIED SUPPLEMENTALLY.
Our Proposed Exploration Program
We must conduct exploration to determine what amount of
minerals, if any, exist on the property and if any minerals which are
found can be economically extracted and profitably processed.
Our exploration program is designed to economically explore and
evaluate our properties.
We do not claim to have any minerals or reserves whatsoever at
this time on any of our properties.
We intend to implement an exploration program and intend to
proceed in the following three phases:
18
Phase 1 will begin with research of the available geologic
literature, personal interviews with geologists, mining engineers and
others familiar with the prospect sites. We have recently begun this
phase of the exploration process on our properties.
When the research is completed, our initial work will be
augmented with geologic mapping, geophysical testing and geochemical
testing of our claims. When available, existing workings, like
trenches, prospect pits, shafts or tunnels will be examined. If an
apparent mineralized zone is identified and narrowed down to a
specific area by the studies, we will begin trenching the area.
Trenches are generally approximately 150 ft. in length and 10-20 ft.
wide. These dimensions allow for a thorough examination of the
surface of the vein structure types generally encountered in the
area. They also allow easier restoration of the land to its pre-
exploration condition when we conclude our operations. Once
excavation of a trench is completed, samples are taken and then
analyzed for economically potential minerals that are known to have
occurred in the area. Careful interpretation of this available data
collected from the various tests aid in determining whether or not
the prospect has current economic potential and whether further
exploration is warranted.
Phase 1 will take about 3 months and cost up to $20,000.
Phase 2 involves an initial examination of the underground
characteristics of the vein structure that was identified by Phase 1
of exploration. Phase 2 is aimed at identifying any mineral deposits
of potential economic importance. The methods employed are
* more extensive trenching
* more advanced geophysical work
* drift driving
Drift driving is the process of constructing a tunnel to take samples
of minerals for testing. Later, the tunnel can be used for mining
minerals . The geophysical work gives a general understanding of the
location and extent of mineralization at depths that are unreachable
by surface excavations and provides a target for more extensive
trenching and core drilling. Trenching identifies the continuity and
extent of mineralization, if any, below the surface. After a thorough
analysis of the data collected in Phase 2, we will decide if the
property warrants a Phase 3 study.
Phase 2 will take about 3 months and cost up to $20,000.
Phase 3 is aimed at precisely defining the depth, the width, the
length, the tonnage and the value per ton of any mineral body.
This is accomplished through extensive drift driving. Phase 3 will
take about 6 months and cost up to $80,000.
We do not intend to interest other companies in the property if
we find mineralized materials. We intend to try to develop the
reserves ourselves.
19
Competitive Factors
The gold mining industry is fragmented. We compete with other
exploration companies looking for gold. We are one of the smallest
exploration companies in existence. We are an infinitely small
participant in the gold mining market. While we compete with other
exploration companies, there is no competition for the exploration or
removal or mineral from our property. Readily available gold
markets exist in Canada and around the world for the sale of gold.
Therefore , we will be able to sell any gold that we are able to
recover.
Regulations
Our mineral exploration program is subject to the Canadian
Mineral Tenure Act Regulation. This act sets forth rules for
* locating claims
* posting claims
* working claims
* reporting work performed
We are also subject to the British Columbia Mineral Exploration
Code which tells us how and where we can explore for minerals. We
must comply with these laws to operate our business. Compliance
with these rules and regulations will not adversely affect our
operations.
Environmental Law
We are also subject to the Health, Safety and Reclamation Code
for Mines in British Columbia. This code deals with environmental
matters relating to the exploration and development of mining
properties. Its goals are to protect the environment through a
series of regulations affecting:
1. Health and Safety
2. Archaeological Sites
3. Exploration Access
We are responsible to provide a safe working environment, not
disrupt archaeological sites, and conduct our activities to prevent
unnecessary damage to the property.
We will secure all necessary permits for exploration and, if
development is warranted on the property, will file final plans of
operation before we start any mining operations. We anticipate no
discharge of water into active stream, creek, river, lake or any
other body of water regulated by environmental law or regulation. No
endangered species will be disturbed. Restoration of the disturbed
land will be completed according to law. All holes, pits and shafts
will be sealed upon abandonment of the property. It is difficult to
estimate the cost of compliance with the environmental law since the
full nature and extent of our proposed activities cannot be
20
determined until we start our operations and know what that will
involve from an environmental standpoint.
We are in compliance with the act and will continue to comply
with the act in the future. We believe that compliance with the act
will not adversely affect our business operations in the future.
Employees
Initially, we intend to use the services of subcontractors for
manual labor exploration work on our properties. Our only technical
employee will be Rodney L. Lozinski, our sole officer and director.
Employees and Employment Agreements
At present, we have no employees, other than Mr. Lozinski, our
sole officer and director, who was compensated for his service. Mr.
Lozinski does not have an employment agreement with us. We presently
do not have pension, health, annuity, insurance, stock options,
profit sharing or similar benefit plans; however, we may adopt plans
in the future. There are presently no personal benefits available to
Mr. Lozinski
- --------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------
This section of the prospectus includes a number of forward-
looking statements that reflect our current views with respect to
future events and financial performance. Forward-looking statements
are often identified by words like: believe, expect, estimate,
anticipate, intend, project and similar expressions, or words which,
by their nature, refer to future events. You should not place undue
certainty on these forward-looking statements, which apply only as of
the date of this prospectus. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual
results to differ materially from historical results or our
predictions.
We are a start-up, exploration stage company and have not yet
generated or realized any revenues from our business operations.
Our auditors have issued a going concern opinion. This means
that our auditors believe there is doubt that we can continue as an
on-going business for the next twelve months unless we obtain
additional capital to pay our bills. This is because we have not
generated any revenues and no revenues are anticipated until we begin
removing and selling minerals. Accordingly, we must raise cash from
sources other than the sale of minerals found on the property. That
cash must be raised from other sources. Our only other source for
cash at this time is investments by others in our company. We must
raise cash to implement our project and stay in business.
21
To meet our need for cash we are attempting to raise money from
this offering. There is no assurance that we will be able to raise
enough money through this offering to stay in business. What ever
money we do raise, will be applied first to exploration and then to
development, if development is warranted. If we do not raise all of
the money we need from this offering, we will have to find
alternative sources, like a second public offering, a private
placement of securities, or loans from our officers or others. We
have discussed this matter with our officers, however, our officers
are unwilling to make any commitment to loan us any money at this
time. At the present time, we have not made any arrangements to
raise additional cash, other than through this offering. If we need
additional cash and can't raise it we will either have to suspend
operations until we do raise the cash, or cease operations entirely.
We will be conducting research in connection with the
exploration of the property. We are not going to buy or sell any
plant or significant equipment. We do not expect a change in our
number of employees.
Limited Operating History; Need for Additional Capital
There is no historical financial information about our company
upon which to base an evaluation of our performance. We are an
exploration stage company and have not generated any revenues from
operations. We cannot guarantee we will be successful in our business
operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital
resources, possible delays in the exploration of our properties, and
possible cost overruns due to price and cost increases in services.
To become profitable and competitive, we conduct into the
research and exploration of our properties before we start
production of any minerals we may find. We are seeking equity
financing to provide for the capital required to implement our
research and exploration phases.
We have no assurance that future financing will be available to
us on acceptable terms. If financing is not available on
satisfactory terms, we may be unable to continue, develop or expand
our operations. Equity financing could result in additional dilution
to existing shareholders.
Results of Operations
From Inception on September 20, 2000
We just recently acquired our first property and are commencing
the research and exploration stage of our mining operations on that
property at this time.
22
Since inception, we have used our common stock to raise money
for the option, for corporate expenses and to repay outstanding
indebtedness. Net cash provided by financing activities from
inception on September 20, 2000 to October 31, 2000 was $16,029, as a
result of proceeds received from advances of $15,979 and cash for
the issuance of common stock.
Liquidity and Capital Resources
As of the date of this registration statement, we have yet to
generate any revenues from our business operations.
We issued 5,000,000 shares of common stock through a Section
4(2) offering in September 2000 to Rodney L. Lozinski, our sole
officer and director. This was accounted for as a compensation
expense of $249,950 and $50.00 for the purchase of 5,000,000 shares
of common stock.
Since our inception, Mr. Lozinski, has advanced funds to pay
expenses of $15,979, which included organizational and start-up costs
and operating capital. The loans do not bear interest and have not
been paid as of the date hereof. There are no documents reflecting
the loan and they are not due on a specific date. Mr. Lozinski will
accept repayment from us when money is available.
As of October 31, 2000, our total assets were $1,029 and our
total liabilities were $19,464.
- --------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------
Officers and Directors
Our sole officer and director is Rodney L. Lozinski. In the
future, we may have more than one officer and director. Pursuant to
our bylaws, each director is elected by the stockholders to a term of
one year and serves until his or her successor is elected and
qualified. Each officer is elected by the board of directors to a
term of one year and serves until his or her successor is duly
elected and qualified, or until he or she is removed from office. The
board of directors has no nominating, auditing or compensation
committees.
The names, addresses, ages and positions of our sole officer and
director is set forth below:
Name and Address Age Positions
Rodney L. Lozinski 46 President, Secretary, Treasurer,
333B-2nd Avenue, NE Principal Accounting Officer, and
Suite 402 and sole a member of the Board of
Calgary, Alberta Directors
Canada T2E 4G7
23
Mr. Lozinski has held his position as our sole officer and
director since inception of our company and is expected to hold his
office/position until the next annual meeting of our stockholders.
Background of Officers and Directors
Rodney L. Lozinski has been our President, Secretary, Treasurer,
Principal Accounting Officer and sole member of our board of
directors since inception. For the last five years, Mr. Lozinski has
been self-employed as a construction contractor.
Conflicts of Interest
We believe that Rodney L. Lozinski will be subject to conflicts
of interest. The conflicts of interest arise from Mr. Lozinski's
other business activities, none of which are related to exploration
or mining.
- --------------------------------------------------------------------
EXECUTIVE COMPENSATION
- --------------------------------------------------------------------
Mr. Lozinski, our sole officer and director, was compensated in
shares of common stock in the amount of $249,950 for his services and
there is no plan to compensate him in the near future, unless and
until we begin to realize revenues and become profitable in our
business operations.
Indemnification
Under our Articles of Incorporation and Bylaws of the
corporation, we may indemnify an officer or director who is made a
party to any proceeding, including a law suit, because of his
position, if he acted in good faith and in a manner he reasonably
believed to be in our best interest. We may advance expenses
incurred in defending a proceeding. To the extent that the officer
or director is successful on the merits in a proceeding as to which
he is to be indemnified, we must indemnify him against all expenses
incurred, including attorney's fees. With respect to a derivative
action, indemnity may be made only for expenses actually and
reasonably incurred in defending the proceeding, and if the officer
or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by
the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the
Securities Act of 1933, which may be permitted to directors or
officers under Nevada law, we are informed that, in the opinion of
the Securities and Exchange Commission, indemnification is against
public policy, as expressed in the Act and is, therefore,
unenforceable.
24
- --------------------------------------------------------------------
PRINCIPAL STOCKHOLDERS
- --------------------------------------------------------------------
The following table sets forth, as of the date of this
prospectus, the total number of shares owned beneficially by each of
our directors, officers and key employees, individually and as a
group, and the present owners of 5% or more of our total outstanding
shares. The table also reflects what their ownership will be
assuming completion of the sale of all shares in this offering . The
stockholder listed below has direct ownership of his shares and
possesses sole voting and dispositive power with respect to the
shares.
Name and Address Number of Number Percentage of
Beneficial Shares Before of Shares of Ownership
Owner [1] Offering After Offering After Offering
Rodney L. Lozinski 5,000,000 5,000,000 55.56%
333B-2nd Avenue NE
Suite 402
Calgary, Alberta
Canada T2E 4G7
- ---------------------
All Officers and
Directors as a
Group (1 person) 5,000,000 5,000,000 55.56%
[1] The persons named above may be deemed to be a parent and
promoter of our company by virtue of his/its direct and
indirect stock holdings. Mr. Lozinski is the only promoter of
our company.
Future Sales by Existing Stockholders
A total of 5,000,000 shares of common stock were issued to our
sole stockholder, all of which are restricted securities, as defined
in Rule 144 of the Rules and Regulations of the SEC promulgated under
the Securities Act. Under Rule 144, the shares can be publicly
sold, subject to volume restrictions and restrictions on the manner
of sale, commencing one year after their acquisition.
Shares purchased in this offering, which will be immediately
resalable, and sales of all of our other shares after applicable
restrictions expire, could have a depressive effect on the market
price, if any, of our common stock and the shares we are offering.
25
- --------------------------------------------------------------------
DESCRIPTION OF SECURITIES
- --------------------------------------------------------------------
Common Stock
Our authorized capital stock consists of 100,000,000 shares of
common stock, par value $0.00001 per share. The holders of our common
stock:
* have equal ratable rights to dividends from funds legally
available if and when declared by our board of directors;
* are entitled to share ratably in all of our assets
available for distribution to holders of common stock upon
liquidation, dissolution or winding up of our affairs;
* do not have preemptive, subscription or conversion rights
and there are no redemption or sinking fund provisions or
rights; and
* are entitled to one non-cumulative vote per share on all
matters on which stockholders may vote.
All shares of common stock now outstanding are fully paid for and
non-assessable and all shares of common stock which are the subject
of this offering, when issued, will be fully paid for and
non-assessable. We refer you to our Articles of Incorporation, Bylaws
and the applicable statutes of the State of Nevada for a more
complete description of the rights and liabilities of holders of our
securities.
Non-cumulative Voting
Holders of shares of our common stock do not have cumulative
voting rights, which means that the holders of more than 50% of the
outstanding shares, voting for the election of directors, can elect
all of the directors to be elected, if they so choose, and, in that
event, the holders of the remaining shares will not be able to elect
any of our directors. After this offering is completed, the present
stockholder will own approximately 55.56% of our outstanding shares.
Cash Dividends
As of the date of this prospectus, we have not paid any cash
dividends to stockholders. The declaration of any future cash
dividend will be at the discretion of our board of directors and will
depend upon our earnings, if any, our capital requirements and
financial position, our general economic conditions, and other
pertinent conditions. It is our present intention not to pay any cash
dividends in the foreseeable future, but rather to reinvest earnings,
if any, in our business operations.
26
Reports
After we complete this offering, we will not be required to
furnish you with an annual report. Further, we will not voluntarily
send you an annual report. We will be required to file reports with
the SEC under section 15(d) of the Securities Act. The reports will
be filed electronically. The reports we will be required to file are
Forms 10-KSB, 10-QSB, and 8-K. You may read copies of any materials
we file with the SEC at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. You may obtain information on
the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC also maintains an Internet site that will
contain copies of the reports we file electronically. The address
for the Internet site is www.sec.gov.
Stock Transfer Agent
Our stock transfer agent for our securities is Pacific Stock
Transfer Company, 5844 South Pecos Road, Suite D, Las Vegas, Nevada
89120 and its telephone number is (702) 361-3033.
- --------------------------------------------------------------------
CERTAIN TRANSACTIONS
- --------------------------------------------------------------------
In September 2000, we issued a total of 5,000,000 shares of
restricted common stock to Rodney L. Lozinski, our sole officer and
directors. This was accounted for as a compensation expense of
$249,950 and cash, of $50.
Since our inception, Mr. Lozinski, advanced loans to us in the
total sum of $15,979, which were used for organizational and start-up
costs and operating capital. The loans do not bear interest and have
not been paid as of the date hereof. There are no documents
reflecting the loan and they are not due on a specific date . Mr.
Lozinski will accept repayment from us when money is available.
- --------------------------------------------------------------------
LITIGATION
- --------------------------------------------------------------------
We are not a party to any pending litigation and none is
contemplated or threatened.
- --------------------------------------------------------------------
EXPERTS
- --------------------------------------------------------------------
Our financial statements for the period from inception to
October 31, 2000, included in this prospectus have been audited by
Matthew J. Hoogendoorn, Chartered Accountant, 875 Merritt Street,
Coquitlam, British Columbia, Canada V3J 7K9, telephone (604) 936-9906,
as set forth in his report included in this prospectus.
27
- --------------------------------------------------------------------
LEGAL MATTERS
- --------------------------------------------------------------------
Conrad C. Lysiak, Attorney at Law, 601 West First Avenue, Suite
503, Spokane, Washington 99201, telephone (509) 624-1475 has acted as
legal counsel for our company.
- --------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------
Our fiscal year end is December 31. We will provide audited
financial statements to our stockholders on an annual basis; the
statements will be prepared by an Independent Chartered Accountant.
Our audited financial statement from inception to October 31,
2000 immediately follows:
INDEPENDENT AUDITOR'S REPORT F-1
FINANCIAL STATEMENTS
Balance Sheet F-2
Statement of Operations F-3
Statement of Stockholders' Deficiency F-4
Statement of Cash Flows F-5
NOTES TO THE FINANCIAL STATEMENTS F-6
28
INDEPENDENT AUDITOR'S REPORT
To the Director
Dundee Mining Inc.
I have audited the accompanying balance sheet of Dundee Mining Inc.
(an exploration stage company) as at October 31, 2000 and the related
statements of operations, stockholder's deficiency and cash flows for
the period from inception on September 20, 2000 to October 31, 2000.
These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with United States generally
accepted auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Dundee
Mining Inc. at October 31, 2000 and the results of its operations and
its cash flows for the period then ended in conformity with United
States generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 1 to
the financial statements, the Company is in the exploration stage
with respect to its mineral property. The Company has not determined
whether the exploration property contains ore reserves that are
economically recoverable. At October 31, 2000 the Company has
nominal cash resources and requires new financing to maintain
operations and initiate exploration work on its mineral property.
These factors together raise substantial doubt about its ability to
continue as a going concern. Management's plans in regards to these
matters are also described in Note 1. The financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.
Chartered Accountant
Coquitlam, B.C.
November 14, 2000
F-1
29
DUNDEE MINING INC.
(An Exploration Stage Company)
Balance Sheet
As of October 31, 2000 Note
ASSETS
Current
Cash $ 151
Mineral property 3 878
----------
Total Assets $ 1,029
==========
LIABILITIES
Current
Accounts payable and accrued liabilities $ 3,485
Advances from related party 5 15,979
----------
Total Liabilities 19,464
==========
STOCKHOLDER'S DEFICIENCY
Common Stock 4
Authorized: 100,000,000 shares, $0.00001 par
value Issued and outstanding: 5,000,000 shares 50
Additional paid-in capital 249,950
Deficit Accumulated During the Exploration Stage (268,435)
----------
(18,435)
----------
Total Liabilities and Stockholder's Deficiency $ 1,029
==========
See accompanying Notes to the Financial Statements
F-2
30
DUNDEE MINING INC.
(An Exploration Stage Company)
Statement of Operations
From Inception (September 20, 2000) to October 31, 2000
Deficit
Accumulated
From
9-20-00
(Inception) to
Note 10-31-00
Revenue $ - $ -
------------ ----------
General and Administrative Expenses
Shareholder's compensation 4 249,950 249,940
Legal fees 15,000 15,000
Audit fees 3,000 3,000
Filing fees 485 485
------------ ----------
268,435 268,435
------------ ----------
Net Loss $ (268,435)$ (268,435)
============ ==========
Basic Loss Per Share $ 0.05
Weighted Average Number of Share Outstanding 5,000,000
See accompanying Notes to the Financial Statements
F-3
31
DUNDEE MINING INC.
(An Exploration Stage Company)
Statement of Stockholder's Deficiency
From Inception (September 20, 2000) to October 31, 2000
Deficit
Accumulated
Additional During the Total
Common Stock Paid-in ExplorationStockholder's
Shares Amount Capital Stage Deficiency
Balance,
September 20, 2000 - $ - $ - $ - $ -
Common stock issued
for cash and services
(Note 4) 5,000,000 50 249,950 - 250,000
Net loss for the period - - - (268,435) (268,435)
--------- ------ ---------- ---------- ----------
Balance,
October 31, 2000 5,000,000 $ 50 $ 249,950 $ (268,435)$ (18,435)
========= ====== ========== ========== ==========
See accompanying Notes to the Consolidated Financial Statements
F-4
32
DUNDEE MINING INC.
(An Exploration Stage Company)
Statement of Cash Flows
From Inception (September 20, 2000) to October 31, 2000
From
9-20-00
(Inception)
to 10-31-00
Cash Flows From Operating Activities
Loss from operations $ (268,435) $ (268,435)
Adjustment to reconcile net loss
to net cash used by operating activities
Common stock issued for services 249,950 249,950
Cash provided by changes in operating assets
and liabilities
Increase in account payable 3,485 3,485
Advances from related party 15,979 15,979
----------- ----------
Net cash provided by operating activities 979 979
Cash Flows From Financing Activities
Issuance of common stock for cash 50 50
----------- ----------
Net cash provided by financing activities 50 50
Cash Flows From Investing Activities
Acquisition costs of mineral property (878) (878)
----------- ----------
Net cash used in investing activities (878) (878)
Increase in cash 151 151
Cash at beginning of period - -
----------- ----------
Cash at end of period $ 151 $ 151
=========== ==========
See accompanying Notes to the Consolidated Financial Statements
F-5
33
DUNDEE MINING INC.
(An Exploration Stage Company)
Notes to Financial Statements
NOTE 1 - ORGANIZATION, DESCRIPTION OF BUSINESS AND BASIS OF FINANCIAL
STATEMENT PRESENTATION
The Company was incorporated in the State of Nevada on September 20, 2000.
Since inception, the Company has acquired 10 mineral claims in the Osoyoos
Mining Division, Province of British Columbia, Canada. To date, the
Company has not conducted any exploration on the claims. Management
intends to raise funds for a preliminary exploration program to assess the
mineral potential of the claims, and to finance the cost of general and
administrative expenses, and projected further losses from operations in
the exploratory stage.
The ability of the Company to maintain its existence and commence
exploration of its mineral claims is dependent upon its raising sufficient
new equity financing. The commencement of principal operations is
dependent upon the discovery of economically recoverable ore reserves,
confirmation of the Company's interest in the mineral claims, the ability
of the Company to obtain necessary financing to complete development, and
future profitable production or proceeds from the sale of all or an
interest in the mineral claims. The likely outcome of these future events
is indeterminable. The financial statements do not include any adjustments
to reflect the possible future effect on the recoverability and
classification of assets or the amounts and classification of liabilities
that may result from the outcome of this uncertainty.
The financial statements present the Company as an exploration stage
company as defined in SEC Guide 7. As it has neither commenced principal
operations nor generated any revenue, the accompanying financial statements
also provide disclosures specified in SFAS No. 7 "Accounting and Reporting
by Development Stage Enterprises".
The Company has elected a December 31 year end. The financial statements
to October 31, 2000 are interim financial statements covering the period
from inception to October 31, 2000.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Mineral property costs
The Company capitalizes the acquisition cost of mineral properties. All
exploration costs are to be expensed as incurred until it has been
determined that a mineral property can be economically developed.
Development costs thereafter will be capitalized. All capitalized costs
are to be amortized over the estimated productive life of the property if
it is placed into commercial production. If a property is sold or allowed
to lapse, the related costs are charged to operations in the period.
The carrying value of the mineral property is subject to periodic review
for impairment whenever events and changes in circumstances indicate that
the carrying value of the asset may not be recoverable. Any losses are to
be charged to operations at the time impairment is determined.
F-6
34
DUNDEE MINING INC.
(An Exploration Stage Company)
Note to Financial Statements
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Financial instruments and financial risk
The Company's financial instruments consist of cash, accounts payable and
accrued liabilities and advances from related party. The fair value of the
current assets and liabilities approximate their carrying amounts due to
the short-term nature of these instruments.
Loss per share
Basic loss per common share has been calculated based on the weighted
average number of shares of common stock outstanding during the period.
Income Taxes
The Company accounts for income taxes under an asset and liability approach
that requires the recognition of deferred tax assets and liabilities for
the expected future tax consequences of events that have been recognized in
the Company's financial statements or tax returns. In estimating future
tax consequences, all expected future events other than enactment of
changes in the tax laws or rates are considered.
Due to the uncertainty regarding the Company's future profitability, the
future tax benefits of its losses have been fully reserved for and no net
tax benefit has been recorded in the financial statements.
NOTE 3 - MINERAL PROPERTY
The Company owns 10 mineral claims known as Cahill 3 to 12 inclusive
situated in the Osoyoos Mining Division, Province of British Columbia,
Canada.
The claims were acquired by staking, and the carrying value of $878
represents the cost of staking and recording.
There has been no exploration work conducted on the property by the Company
and there is no record of exploration on the property by other parties.
NOTE 4 - COMMON STOCK
The Company has issued 5,000,000 shares for cash consideration of $50 and
ascribed value for organizational services of $249,950 to Rodney L.
Lozinski. The ascribed value for the services represents the difference
between the total consideration of $250,000 (($0.05 per share) recorded on
the issuance of these shares, and the cash consideration received by the
Company.
F-7
35
DUNDEE MINING INC.
(An Exploration Stage Company)
Note to Financial Statements
There have been no other shares issued to date.
There are no shares subject to warrants, agreements or options at October
31, 2000.
The Company intends to offer for sale in the immediate future a further
4,000,000 shares at an offering price of $0.05 per share.
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company is wholly owned by Rodney L. Lozinski, who received 5,000,000
shares for cash of $50 and ascribed value of $249,950.
Mr. Lozinski is owed $15,979 at October 31, 2000 for advances made to the
Company
NOTE 6 - INCOME TAXES
No provision for income taxes has been made for the initial period
presented as the Company incurred a net loss during the period.
The potential benefit of the net operating loss carry forward has not been
recognized in the financial statements since the Company cannot be assured
that it is more likely than not that such benefit will be utilized in
future years. The components of the net deferred tax asset, the statutory
tax rate, the effective tax rate, and the elected amount of the valuation
allowance are as follows:
Net loss $ 268,435
Compensation expense not deductible for tax purposes (249,950)
----------
Net operating loss carry forward (expiring 2020) $ 18,485
==========
Statutory tax rate 15%
Effective tax rate -
Total deferred tax assets $ 2,773
Less: valuation allowance (2,773)
----------
Net deferred tax assets $ -
==========
NOTE 7 - UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
recognize something other than a date. The Company's own financial
accounting functions are not technologically dependent. Although the change
in date has occurred, it is not possible to conclude that all aspects of the
Year 2000 Issue that may affect the entity, including those related to
customers, suppliers, or other third parties, have been fully resolved.
F-8
36
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only statute, charter provision, bylaw, contract, or other
arrangement under which any controlling person, director or officer of
the Registrant is insured or indemnified in any manner
against any liability which he may incur in his capacity as such, is as
follows:
1. Article XII of the Articles of Incorporation of the company, filed
as Exhibit 3.1 to the Registration Statement.
2. Article XI of the Bylaws of the company, filed as Exhibit 3.2 to
the Registration Statement.
3. Nevada Revised Statutes, Chapter 78.
The general effect of the foregoing is to indemnify a control
person, officer or director from liability, thereby making the company
responsible for any expenses or damages incurred by such control person,
officer or director in any action brought against them based on their
conduct in such capacity, provided they did not engage in fraud or
criminal activity.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering (assuming all shares are
sold), all of which are to be paid by the registrant, are as follows:
SEC Registration Fee . . . . . . $ 100.00
Printing Expenses . . . . . . . 6,500.00
Accounting Fees and Expenses . . . . . 10,000.00
Legal Fees and Expenses . . . . . . 25,000.00
Blue Sky Fees/Expenses . . . . . . 2,000.00
Transfer Agent Fees . . . . . . 1,000.00
Miscellaneous Expenses . . . . . . 5,400.00
------------
TOTAL $ 50,000.00
============
Less Paid to October 31, 2000 (15,000.00)
------------
To be paid 35,000.00
------------
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Registrant has sold the
following securities which were not registered under the Securities
Act of 1933, as amended.
37
Name and Address Date Shares Consideration
- ------------------ --------- --------- ----------------
Rodney L. Lozinski 09/29/00 5,000,000 Services valued at
333B-2nd Avenue, NE $249,950 and advances of
Suite 402 $50
Calgary, Alberta
Canada T2E 4G7
We issued the foregoing restricted shares of common stock to Mr.
Lozinski under Section 4(2) of the Securities Act of 1933. Mr. Lozinski
is a sophisticated investor, is the sole officer and director of the
company, and was in possession of all material information relating to the
company. Further, no commissions were paid to anyone in connection with
the sale of the shares and general solicitation was made to anyone.
ITEM 27. EXHIBITS.
The following Exhibits are filed as part of this Registration
Statement, pursuant to Item 601 of Regulation K. All Exhibits have been
previously filed unless otherwise noted.
Exhibit No. Document Description
3.1 Articles of Incorporation.
3.2 Bylaws.
4.1 Specimen Stock Certificate.
5.1 Opinion of Conrad C. Lysiak, Esq. regarding the legality of
the Securities being registered.
23.1 Consent of Matthew J. Hoogendoorn, Chartered Accountant.
23.2 Consent of Conrad C. Lysiak, Esq.
99.1 Subscription Agreement.
38
ITEM 28. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
a. To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
b. To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
c. To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any change to such information in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
39
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing of this Form SB-2 Registration
Statement and has duly caused this Form SB-2 Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
Calgary, Alberta, Canada this 28th day of December, 2000.
DUNDEE MINING INC.
BY: /s/ Rodney L. Lozinski
Rodney L. Lozinski,
President, Treasurer, Secretary, Chief
Executive Officer, Principal Accounting
Officer, Principal Financial Officer and a
sole member of the Board of Directors
KNOW ALL MEN BY THESE PRESENT, that each person whose signature
appears below constitutes and appoints Rodney L. Lozinski, as true and
lawful attorney-in-fact and agent, with full power of substitution, for his
and in his name, place and stead, in any and all capacities, to sign any
and all amendment (including post-effective amendments) to this
registration statement, and to file the same, therewith, with the
Securities and Exchange Commission, and to make any and all state
securities law or blue sky filings, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and
thing requisite or necessary to be done in about the premises, as fully to
all intents and purposes as he might or could do in person, hereby
ratifying the confirming all that said attorney-in-fact and agent, or any
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this Form
SB-2 Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
/s/ Rodney L. Lozinski President, Chief Executive 12/28/00
Rodney L. Lozinski Officer, Treasurer, Secretary
Principal Accounting Officer,
Principal Financial Officer,
and sole member of the Board
of Directors